Correlation Between CORONGLRES CDIS101 and Ecora Resources

Can any of the company-specific risk be diversified away by investing in both CORONGLRES CDIS101 and Ecora Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CORONGLRES CDIS101 and Ecora Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CORONGLRES CDIS101 and Ecora Resources PLC, you can compare the effects of market volatilities on CORONGLRES CDIS101 and Ecora Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CORONGLRES CDIS101 with a short position of Ecora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORONGLRES CDIS101 and Ecora Resources.

Diversification Opportunities for CORONGLRES CDIS101 and Ecora Resources

0.43

Correlation Coefficient

CORONGLRES CDIS101  Ecora Resources

Very weak diversification

The 3 months correlation between CORONGLRES and Ecora is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CORONGLRES CDIS101 and Ecora Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecora Resources PLC and CORONGLRES CDIS101 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CORONGLRES CDIS101 are associated (or correlated) with Ecora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecora Resources PLC has no effect on the direction of CORONGLRES CDIS101 i.e., CORONGLRES CDIS101 and Ecora Resources go up and down completely randomly.

Pair Corralation between CORONGLRES CDIS101 and Ecora Resources

Assuming the 90 days horizon CORONGLRES CDIS101 is expected to under-perform the Ecora Resources. In addition to that, CORONGLRES CDIS101 is 2.16 times more volatile than Ecora Resources PLC. It trades about -0.22 of its total potential returns per unit of risk. Ecora Resources PLC is currently generating about -0.05 per unit of volatility. If you would invest  76.00  in Ecora Resources PLC on September 23, 2024 and sell it today you would lose (2.00) from holding Ecora Resources PLC or give up 2.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

CORONGLRES CDIS101  vs.  Ecora Resources PLC

CORONGLRES CDIS101

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CORONGLRES CDIS101 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ecora Resources PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecora Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CORONGLRES CDIS101 and Ecora Resources

The main advantage of trading using opposite CORONGLRES CDIS101 and Ecora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CORONGLRES CDIS101 position performs unexpectedly, Ecora Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ecora Resources will offset losses from the drop in Ecora Resources' long position.

The idea behind CORONGLRES CDIS101 and Ecora Resources PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.